In 2005, A. K. Antony entered the Rajya Sabha and was inducted into the Union Council of Ministers as Defence Minister following Natwar Singh's expulsion from the Congress and Pranab Mukherjee's transfer to the Ministry of External Affairs
India sign one of its biggest ever arms purchase contracts to procure six Scorpene submarines from Thales.

Contract was signed in year 2005 but India will get the first Submarine in year 2015.

Malaysian government also bought the Submarine , media said kickbacks were paid , and there was delay in transfer of technology to Malaysia and sub marines also.

Regarding this deal Outlook exposed 4 emails.
One mentioned an e-mail from Jean Paul Perrier, CEO of Thales, to Abhishek Verma, a businessman who has been previously named by the CBI and Enforcement Directorate in several cases of financial fraud. (Incidentally, he is the one who revealed the name of Vincent George, private secretary to Sonia Gandhi, in a case of amassing wealth disproportionate to known sources of income, which is still pending with the CBI.)

According to outlook Jean Paul Perrier, CEO wrote to Abhishek Verma that

‘We confirm the payment of 4 per cent of the Scorpene contract price,’

If true, the payoffs are over Rs 500 Crore.

What is War Room Leak Case ?

CBI took over investigations on February 18, 2006 but did not register a preliminary enquiry till December 20, 2007.

Why so much delay?

War link case and Sub Marine Deal both are related with each other.

May 2005:
Naval officers posted in the Operations Directorate of Naval Headquarters were found trading off classified information of a commercial nature.
The information related to fleet acquisition plans.

Naval Board of Inquiry held three officers - Captain Kashyap Kumar and Commanders Virendra Rana and V K Jha - guilty of leaking secret information in exchange for bribes and favors.
In October 2005, they were dismissed from the Navy on charges of “compromising the security of classified information and jeopardizing the interests of the state”.
Navy Chief Admiral Arun Prakash offered to resign after the involvement of his wife’s nephew, Ravi Shankaran, came to light.

One of the dismissed officers, Kashyap Kumar moved the Delhi High Court challenging his dismissal.
February 2006: The case was transferred to the CBI.

April 5, 2006:
The CBI arrested six persons.
Nine persons were charged with conspiring to trade off classified information, the disclosure of which is likely to affect the sovereignty and integrity of the country.
All nine were booked under the Official Secrets Act and charged with criminal conspiracy

Three Navy officers were summarily dismissed in October in a ‘War Room Leak’. They were not court-martialled, but sacked under the rarely-used President’s ‘Pleasure Doctrine’, since the ‘‘classified information’’ they leaked, after accepting ‘‘gratification’’, was ‘‘likely to affect the security of the State’’. Curiously, the civilians named by the magazine as having received the leaked information (including information about the submarine deal) have not even been interrogated so far. One of them, a close relative of the serving Navy chief, is said to be linked to Verma, who is alleged to have negotiated the deal ‘‘on behalf of the Congress party’’.

Media has reported that the makers of the Scorpene submarine Thales
Paid Rs. 500 Crore (about USD 10 mn) to government decision makers as kickbacks.
The amount was channeled via middlemen such as Abhishek Verma.
Also involved was Ravi Shankaran, a relative of the then chief of navy staff Arun Prakash.
He is the prime accused in the Navy War Room spy scandal

In another case
CBI had arrested Verma and his wife Anca Neacsu earlier this month, and found that Rheinmetall Air Defence (RAD) had transferred $530,000 in Verma's account, which was 10% of the bribe along with interests, on February 17, 2011, in the US escrow account of Ganton.

In 2007, Prashant Bhushan of the Centre for Public Interest Litigation filed a petition with the Delhi High Court to investigate whether there had been kickbacks in the Scorpene submarine deal.

The High Court took a strong line with the investigating agency, saying "We feel dissatisfied with that you've done so far.

If you've tried to shield someone, then we will come down very heavily on you"

About Thales Company and Scams and One leader went to Jail

Thales is not innocent company

By passing of French Law –

Malaysia Scam –

Year 2002 –

French law and OECD Convention against corruption in place because of that the Company required to find a another way to pay kickbacks and do corruption.

The method used was to create “service providers” that could “increase invoices” in order to take the place of commissions.

Thus, when the French state company DCN terminated its contracts, Thales took over as a private company, not involving the state.

Thales International was appointed to coordinate the political connections.

A commercial engineering contract was then signed between DCNI and Thales, referred to as “C5”.

The “C5? contract covered 30 million euros (RM119.4 million) in commercial costs abroad. The companies used in the Malaysian case were “Gifen in Malta, Eurolux in Luxemburg and Technomar in Belgium”.

The travel expenses of Baginda and Altantuya were covered by these.

Another “consulting agreement” was signed in 2000 between Thint Asia and Terasasi for 2.5 million euros.

The commissions and dividends for the Scorpene deal were funnelled through two companies, Terasasi and Perimekar.

Year 2002 –

DCNS S.A. (formerly the Direction Technique des Constructions Navales and the Direction des Constructions Navales) is a naval defence company based in France.

In 2002, DCN and Thales established the joint company Armaris to exploit their combined capabilities.

This collaboration improved DCN's weapons systems portfolio and increased Thales' business in shipbuilding.

On 29 March 2007, DCN and Thales finalized an agreement with the French government and consolidated their naval activities in France. DCN acquired all of Thales' French naval business, excluding its equipment activities, and became the sole shareholder of Armaris and MOPA2. Simultaneously, Thales acquired a 25% stake in DCN along with the French government, which retained a 75% stake.

The acronym DCN has been replaced by the brand DCNS.

Media has reported that

The allegations relate to one of France's biggest defense conglomerates, the state-owned shipbuilder DCN, which merged with the French electronics company Thales in 2005 to become a dominant force in the European defense industry.

DCN's subsidiary Armaris is the manufacturer of Scorpene-class diesel submarines sold to India, Pakistan and Malaysia among other countries. All of the contracts, according to the lawyers acting for Suaram, Malaysian human rights NGO, are said to be suspect.

There have been numerous deaths involving DCN defense sales in Taiwan and Pakistan. Prosecutors are suspicious that11 French submarine engineers who were murdered in a 2002 bomb blast in Karachi – first thought to have been the work of Al Qaeda – were actually killed in retaliation for the fact that the French had reneged on millions of dollars in kickbacks to Pakistani military officers.

The investigation in Malaysia has been prompted by human rights group Suaram as it involved current Prime Minister Najib Tun Razak when he was defense minister and his friend Abdul Razak Baginda whose company Primekar was alleged to be paid a huge commission during the purchase of two Scorpène submarines.

South Africa –
In 2002-03, the government of President Thabo Mbeki was rocked by allegations that Deputy President Jacob Zuma took bribes from Thales ($75,500 a year) to shield it from a corruption probe into a $5 billion arms deal in 1999-2000.

After that South Africa’s investigating unit, the Scorpions, started the probe.
Zuma was found to be a ‘‘secret shareholder’’ in Nkobi, a company owned by high-profile businessman Schabir Shaik, who was involved in the arms deal with Thales
Jean-Paul Perrier figures prominently in the South African arms scandal. He allegedly approved a pact struck by Shaik and Thales’s country head in South Africa to bribe Zuma, in exchange for his services
Scorpion did fast and honest investigation and result was that Shaik was sentenced to a 15-year jail term. Inevitably, the Shaik trial forced President Mbeki to sack Zuma from office.

2nd Scam –
Thales and Taiwan
Year 1991 –
Taiwan bought six warships for $2.8 billion
Thales had signed an ‘Integrity Pact’ with the Taiwanese government, which meant the deal would be void if any middlemen were found. Subsequent exposures revealed that Thales had engaged Andrew Wang, a local agent, to bribe politicians and bureaucrats in payoffs of about $600 million. In a murky twist to the tale, Wang fled Taiwan in 2000 following the death of a navy officer, who was found murdered when he was about to blow the whistle on colleagues for bribe-taking
Chen Shui-bian won the presidential election in 2001 by making the Wang case central to his anti-corruption platform. Taiwan is now demanding that Thales repay $600 million from a slush fund frozen in Swiss banks.

Michel Josserand, former head of Thales Engineering, in an interview to the leading French daily Le Monde, that Thales maintains ‘‘a centralised slush fund to bribe and corrupt officials to win contracts in various countries’’.
He revealed that the company has ‘‘a secret internal system to pay commissions to the extent of 2 per cent of the company’s annual sales ($11.5 billion last year)’’.

Ethics world, a global anti-corruption watchdog body, has named Thales as being involved in the ‘‘world’s top 10 corruption scandals of 2006’’.

Suggested Reading –

Short Biography of Pranab Mukherjee President of India the obedient of Indira Gandhi